The Breakdown | Explaining Southern California's economy
Business & Economy

Groups concerned with Herbalife's business practices meets with CA Attorney General's staff

A worker cleans the logo on the Herbalife sign as finishing touches are put on the company's building in Torrance, Calif.
A worker cleans the logo on the Herbalife sign as finishing touches are put on the company's building in Torrance, Calif.

A coalition of groups concerned about the business practices of Herbalife met Friday in Los Angeles with staff from the office of California Attorney General Kamala Harris.   

The groups, including the League of United Latin American Citizens and  the Coalition for Humane Immigrant Rights of Los Angeles  (CHIRLA), said the Los-Angeles-based nutritional supplement company aggressively targets ethnic minorities – especially latinos.  They want California’s Attorney General to investigate allegations that Herbalife is running a pyramid scheme.  CHIRLA's Director of Policy and Advocacy Joseph Villela said Latinos are especially vulnerable to Herbalife promises of big returns, but many have lost money. 

"Some of the stories that CHIRLA was able to see:  in order for you to climb the ladder, you have to invest from 4,000 to 10,000 dollars, and there was no return on that investment," said Villela.

Villela would not comment on what was said in the meeting.  A spokesman for the California Attorney General's office confirmed the meeting happened but didn't provide any more information.

"Our office always tries to accommodate requests from the public," said Nick Pacilio.  "I can neither confirm nor deny the existence of investigations."

The  meeting came a day after Massachusetts Senator Edward Markey called on the Securities and Exchange Commission and the Federal Trade Commission to investigate Herbalife.  

“There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families,” said Senator Markey, a member of the Commerce, Science and Transportation Committee. “Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company. I have serious questions about the business practices of Herbalife and their impact on my constituents, and I look forward to receiving responses to my inquiries.”

The company has defended itself vigorously against attacks on its business model in the past.  Last September, Herbalife named former Los Angeles Mayor Antonio Villaraigosa as a Senior Advisor. 

In a statement, an Herbalife spokeswoman said Herbalife received a letter from Senator Markey and looked forward "to an opportunity to introduce the company to him and address his concerns at his earliest convenience."

"We would also welcome an opportunity to educate the group assembled by LULAC, " the statement continued, "In order to correct the misinformation and misperceptions they may have been given about Herbalife."